Former online payroll processing upstart Perquest appears to have sold all of its client accounts to business services behemoth ADP. Perquest is currently leasing 38,000 square feet of space at the Dublin Corporate Center. According to industry insiders, the sale appears to have taken place last November. Although Perquest has not confirmed the deal with ADP, Perquest’s venture capital funding may have dried up after the initial $40M had been provided. That venture capital firm is rumored to have struck a deal with ADP in trying to recover at least a portion of the venture capital investment.

As is the case with many ADP acquisitions, the deal with Perquest appears to be a simple customer account purchase without the actual companies. Commenters on The Payroll Experience Blog noted that Perquest CEO Tom Sinton has sold a company, or at least the company’s client accounts, to ADP in the past. ADP purchased the Pleasanton-based ProBusiness from Sinton just a few years ago. While some have accused Sinton of masterminding an exit strategy to line his own pockets at the expense of Perquest’s employees, others have jumped in to defend Sinton. Sinton’s defenders countered that Sinton had few choices left once Perquest’s venture capital funding dried up.

While Perquest appears to have sold all of its client accounts to ADP, it is still current with its lease at the Dublin Corporate Center. Perquest may be using some of its facility to support the transition of client payroll accounts over to ADP. This migration process may take a few more months to complete. Whether the Dublin Corporate Center has lined up a new tenant to take over the 38,000 square feet of space that will be vacated by Perquest remains unclear.

The meteoric rise and devastating fall of Perquest seems to be related to the outrageously high expectations by its venture capital backers and an insatiable desire to grow at any cost. As with many failed venture capital start-ups, Perquest simply spent its cash too quickly without acquiring sufficient new customers to sustain the burn rate. Perquest was not available for comments and appears to have taken down its website.